3. Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

most common form of organization

reduced legal liability for investors

lower taxes

harder to transfer ownership

4. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

5. External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

7. Which of the following financial statements is concerned with the company at a point in time?

balance sheet

retained earnings statement

statement of cash flows

income statement

8. Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return if 14 percent, what is the present value of their dividends over the next four years?

$12.50

$11.63

$9.72

$13.50

9. An activity that has a direct cause-effect relationship with the resources consumed is a(n):

11. Tule Time Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?

0.11

1.11

0.90

1.90

12. How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm’s cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt?

16.The group of users of accounting information charged with achieving the goals of the business is its:

investors

auditors

creditors

managers

17. Teakap, Inc. has current assets of $1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000 and retained earnings of $1,468,347. How much long-term debt does the firm have?

$803,010

$2,303,010

$1,844,022

$2,123,612

18. The cash conversion cycle?

begins when the firm invests cash to purchase the raw materials that would be used to produce the goods that the firm manufactures.

estimates how long it takes on average for the firm to collect its outstanding accounts receivables balance.

begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales.

19. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)

$480,906

$429,560

$414,322

$477,235

20. Jack Robbins is saving for a new car. He needs to have $21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar)

$26,454

$19,444

$22,680

$16,670

21. Which of the following presents a summary of changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?

22. M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they use?

$225

$600

$375

$321

23. Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time:

that has been arranged from the highest number to the lowest number.

to determine the amount and/or percentage increase or decrease that has taken place.

24. Jayadev Athreya has started his first job. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years?

$2,667,904

$5,233,442

$1,745,600

$3,594,524

25. Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.

What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.

29. If a company’s weighted average cost of capital is less than the required return on equity, then the firm:

is financed with more than 50% debt

is perceived to be safe

partnership

has debt in its capital structure

30. Your firm has an equity multiplier of 2.47. What is the debt-to-equity ratio?

0

1.74

0.60

1.47

31. The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called:

master budgeting

static reporting

responsibility accounting

flexible accounting

32. Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company’s bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)

2. One of the ways to change the course of a brand is to modify the product. Under product modification, ________ adds size, weight, materials, supplements, and accessories that expand the product’s performance, versatility, safety, or convenience.

technological improvement

feature improvement

style improvement

quality improvement

3. Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called ________.

4. This is designed to check systematically and continuously whether the premises on which the strategy is based are still valid

Special alert control

Strategic surveillance

Implementation control

Premise control

5. A firm must know where to position its product based on price and

promotional efforts

quality

communication

region

6. When performing this analysis, it is good for strategic planners to consider similarities between the benefits the customers derive from the products and services that other firms offer.

Competitive analysis

Business analysis

Customer analysis

Company analysis

7. What is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image?

12. Company X's principal strength is its inbound and outbound logistics system; its relative weakness, however, is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and, as a result, the company is known for its dependable service. This type of analysis allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels.

Disaggregating

Benchmarking

Past performance comparison

Industry comparison

13. The strategic factor that involves the beliefs, values, attitudes, opinions, and lifestyles of persons in the firm’s external environment, as developed from cultural, ecological, demographic, religious, educational, and ethnic conditioning.

Political factor

Stakeholder factor

Economic factor

Social factor

14. Leaders galvanize commitment to embrace change through clarifying strategic intent, building an organization, and

shaping organizational culture

developing a vision

developing a mission

planning strategy

15. How do functional tactics compare to business strategies?

Functional tactics are more focused on the general direction of the firm than business strategies.

Functional tactics are more focused on a commitment to corporate strategy than business strategies.

16. Under which of the following conditions is the frequency the most important factor in media selection?

When introducing flanker brands

When going into undefined target markets

When launching infrequently purchased brands

When there is high consumer resistance to the product

17. New-to-the-world products are ________.

new product enhancements that supplement established products

low-cost products designed to obtain an edge in highly competitive markets

new products that create an entirely new market

existing products that are targeted to new geographical markets

18. BMW’s "The ultimate driving machine," American Express' "Don't leave home without it," New York Times' "All the news that's fit to print," and AT&T's "Reach out and touch someone" are all examples of ________.

brand mission

brand vision

brand slogan

brand personality

19. Which component of a marketing audit includes major developments in income, prices, savings, and credit that affect the company?

20. Prestige LLC, a small company that manufactures specialty cereals and energy bars, wants to launch a "green marketing" program in response to heightened consumer awareness about environmental issues. What should the company do to maximize the program's chances of being successful?

Explain the rules and regulations laid out by governmental agencies to protect the environment.

Focus on the efforts and costs incurred by the company to bring these "green" products to consumers.

Emphasize benefits to the consumer rather than environmental benefits.

Demonstrate that the products will benefit both customers and the society in the long-term.

21. When diversification involves additions of a business related to the firm in terms of technology, markets or products, it involves

22. These social responsibilities are those that are voluntarily assumed by a business or organization. They include public relations activities, good citizenship, and full corporate social responsibility.

Economic responsibility

Legal responsibility

Employee responsibility

Discretionary responsibility

23. Which control should periodically reassess its approach to the marketplace with a good marketing audit?

29. This is a historically popular technique through which managers create a quick overview of a company's strategic situation—it is based on achieving a sound fit between internal resources and the external situation.

Internal analysis

Value chain analysis

External analysis

SWOT analysis

30. The marketing manager needs to know the cost of the research project before approving it. During which stage of the marketing research process would such a consideration most likely take place?

1. Because practical considerations make job tryouts for all candidates infeasible, it is necessary to __________ the relative level of job performance for each candidate on the basis of available information.

10. As a university student, your institution’s social principles and practices reflect on you, as a stakeholder, in the organization. Therefore, it is your right to question how these practices should be evaluated in relation to the social issues that the school is addressing. If your university provides job-share programs, builds a day-care facility, and only uses recycled paper, it could be said to be ________.

fulfilling its social obligation

socially image conscious

socially responsive

socially aware

11. According to the job characteristics model, autonomy is defined as the degree to which

20. Sam Meyers manages a telemarketing call center. He has 20 employees working for him who are displeased with the way he yells and threatens to terminate them for what they see as small issues. Which kind of power is Sam using to get the job done?

Reward power

Referent power

Coercive power

Legitimate power

21. In _____, workers have been fired for refusing to quit smoking, for living with someone without being married, drinking a competitor’s product, motorcycling, and other legal activities outside of work.

invasion of privacy

lifestyle discrimination

defamation

constructive discharge

22. Mary arrives at her new job. Before she can begin actually doing the work, she must complete a series of activities including role playing and virtual reality interactions. What type of training method does Mary’s new employer use?